An interesting article on the purchase. For the sake of Twitch fans, I hope it doesn't go the way of Goodreads.
So Amazon is buying Twitch, the video-game livestreaming site, for $970 million in cash, apparently beating out Google's YouTube unit in the process. That unites the e-commerce giant with the world's largest site for the gaming community, on which users can upload or stream video of games or commentary.
Which raises an interesting question. Just what does Amazon know about managing a social-network community, anyway? The Seattle merchant isn't merely a novice when it comes to the social space; it's a novice whose preliminary forays in this area have received mixed reviews at best.
Remember GoodReads? The social reading website, with an emphasis on books, catalogues, and reviews, startup up in 2006 as a site for members to discuss the books that they loved. Amazon purchased GoodReads in March 2013; not long afterward, it was enmeshed in accusations of censorship and stifling creativity after it reportedly deleted hundreds of user reviews and ratings without warning, sparking a backlash by a small but active group of members.
That example could leave some Twitch fans a little worried. And with just how fanatic and engaged loyal Twitch's users are, Amazon might want to take extra steps to keep them happy.
Buying a social network doesn't just mean you've purchased another outlet for marketing your products—and that's exactly how many Goodreads members felt post-acquisition. It means you have a community to tend to. Manage that badly, and you get disillusionment. Disillusionment leads to frustration, frustration leads to anger, and anger leads to the Dark Side. Or at least to out-migration, often of the most innovative or talented members.
The Story So Far
For now, Twitch users and other gamers seem to be pleased with the acquisition:
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Rumor had it Google was in serious talks to buy the gaming site. The purchased would've been a smart move for the search engine giant, given that it already owns YouTube, still the king of online video streaming.
A partnership with YouTube would have also made sense for Twitch, as YouTube’s gaming community is one of the site’s most passionate and engaged groups on the Internet. Massive audiences tune into watch YouTube personalities like PewDiePie, a Swedish vlogger who runs the most subscribed YouTube channel of all time, record himself playing and commenting on games.
Now it seems as though Amazon is also trying to gain an edge on the gaming and social market, all the while appealing to a younger audience. For the past several years, Amazon has been investing in social games—building a gaming studio in San Francisco to compete with Zynga and King.com, as well as beefing up their number of games developers.
The acquisition of Twitch is not only one of Amazon’s priciest purchases to date, but also their biggest and most telling moves in entering the world of games.
Pursuing gaming as spectator sport can grant the e-commerce company access into the enormous niche community, a growing group full of gaming fanatics who religiously tune into livestreams of games like League of Legends, a multiplayer online game.
The demand for spectator sports has transformed into the creation of “eSports”, or high stakes tournaments armed with throngs of fans, animated commentators, and—for League of Legends competitions—$2 million in prize money to its winners.
The potential for advertisements and revenue in the Twitch and eSports format should by now be pretty obvious. Amazon recently had another run-in with Google in news that the e-commerce company is gearing up for its own online advertising platform to rival Google’s own advertising business.
Having a foot in spectator gaming is already access to a huge pile of revenue, and then to be able to have a direct line to integrated ads and games buying? The potential for earnings through Twitch, for now, seems limitless.
One thing is for sure, this is Amazon’s first venture in operating a social site. With Twitch’s community being so passionate and niche, Amazon will have to play its cards right so as not to destroy the integrity of the gaming fan favorite.